Plan unveiled to build 100,000 basic homes

Mr Shearer set out the new policy yesterday, saying it would be funded by a $1.5 billion kickstart. Photo / Supplied

Labour leader David Shearer has unveiled a new affordable housing policy to build 100,000 basic homes for first home buyers, focusing on Auckland - but National has described it as "a joke" and "massively hopeful".

Mr Shearer set out the new policy yesterday, saying it would be funded by a $1.5 billion kickstart in funding, raised through "affordable homes" bonds.

The homes would be built over 10 years on land owned or bought by the Government and sold only to first home buyers at just above the cost of building them.

Housing spokeswoman Annette King said the cost of building each house would be less than $300,000.

But National's Economic Development Minister, Steven Joyce, said the policy was completely unrealistic.

He claimed that the total cost of of the 100,000 houses would be $30 billion. It was difficult to see how an initial $1.5 billion kickstart would fund that, even if the homes were sold as soon as they were built.

Mr Shearer said Labour had already spoken to construction companies about the project, which would be a joint project between the Government, private companies and social housing groups.

He said it would be the biggest state building programme in 50 years and would provide much-needed jobs and apprenticeships.

He turned the blowtorch on National in his speech, pointing to high unemployment and the number of people leaving for Australia.

"When our opponents say they want to grow our economy, I don't doubt their sincerity. But I doubt their method," Mr Shearer said. "Unemployment is 7.3 per cent. Can you remember who was in power the last time it was this bad ... It was the last National government."

Labour's policy

*KiwiBuild: a 10-year programme to build 100,000 basic homes for first-home buyers in partnership with the private sector and community housing groups. On average, the houses will cost less than $300,000.

*Two-thirds of the homes built in the first five years will be in Auckland. Others will be in Christchurch, Tauranga, Nelson, Wellington and Queenstown.

*Cost: a one-off $1.5 billion initial investment, to be recouped as homes are sold. Will also sell "housing affordability bonds".